Etail Solutions Blog

The writing is on the wall: the third-party seller model is in serious trouble. If that’s you, you don’t need to be told that your business is under attack, you’re living it. Your livelihood is currently being threatened by an ever-growing number of resellers, private labelers, manufacturers and brands. Often there’s no limit on the number of resellers who can sell the same products as you. With manufacturers and brands cutting out the middleman and selling directly to your customers, your once profitable category is quickly becoming crowded.

In ten years the ecommerce industry will look nothing like it does now. Improved efficiency will soon become a basic competitive requirement. Many merchants know their businesses need to evolve. Your business needs to evolve too.

Eliminating waste isn’t enough. Sustained competitive advantage only comes from bridging the gap between supply and demand with integration. Only then will you have the data integrity, process automation and time that sustainable growth requires. Online sellers who adapt to this new reality first and fastest have the best chance of staying ahead of the pack in today's constantly changing market.

Many merchants' front-end software for sales have no way of connecting with their back-end supply and operational systems. Since they don't communicate, information isn't being shared across the business. As a result, they can't get the information they need into the places it has to be, when it has to be. Without this back-end to front-end integration, they are forced to handle the resulting process failures and inefficiencies by using tedious workarounds and hour after hour after hour of manual data entry - which is never in time to make key decisions.

When most merchants hit their growth ceiling they know they need to do something to break through it - even though they aren't always exactly sure what that something is. So they set out to discover exactly what is necessary to overcome their growth barriers. Some eventually find a solution - but not before wasting a lot of time and money.

Warren Buffet said that in ten years, the retail industry will be unrecognizable. The billionaire investor confirmed what we already knew when he sold off the last $900 million of his retail stock and said, "The department store is online now."

That’s old news.

The real news is what’s happening inside the online marketplaces.

Making money isn't just about selling and sales revenue, it's all about bottom line profit. 

As they say in the real estate industry: "You don’t make money when you sell, you make money when you buy." In ecommerce, we’d add: "you only make money when you buy and fulfill smarter than the other guy."

Another problem many merchants encounter on a daily basis is poor visibility. They don't have a dependable real-time view of their - or their suppliers’ - inventory, therefore they can't manage it effectively. Having this visibility is critical to preventing stockouts and overstocks, and to increasing selection.

One of the biggest problems holding your business back is time - or rather, a lack of time. Inefficient software only makes things worse, not better. Entire days are wasted on manual processes resulting from errors and functionality gaps.

When your day-to-day operations and business processes involve hours of data gathering and data entering and template-filing and troubleshooting and problem solving - you don’t have enough time left over to think strategically about your business. And you need to think strategically about your business if you want it to survive and grow!

Did you know you can increase your margins post-sale? Well, why not? You use a repricer to win the Buy Box, while selling to customers at the highest possible price. You don’t think twice about driving up your average order value (AOV) and growing your topline. These activities are second nature to you. But the concept of creating margin points after the customer agrees to your selling price … after the topline has been set … might be new to you. Well, we feel it should be just as necessary as repricing or any of the other operations you perform daily. 

Knowing and increasing your listing to SKU ratio is a sure way to grow your top line. So how do you determine your ratio? If you’re selling the same item on three different listings it would be 3 to 1. Many merchants have a listing to SKU ratio of less than one to one. This means you have access to a large SKU supplier catalog, but you’re only listing a small percentage of those products for sale.

If you’re averaging $250,000 a month in sales, and your listing to SKU ratio is 0.5 to 1, what would your sales look like if it was 2 to 1 - or 3 to 1? Sales wouldn’t exactly double or triple due to the Pareto Principle – 80% of your sales come from 20% of your items. However, you’d definitely see a big lift! More listings mean more sales. Best of all, it doesn’t cost you anything but the effort you put in. You’re more effectively leveraging inventory you already have access to.